A number of international institutions established in the wake of World War II including the General Agreement on Tariffs and Trade (GATT), succeeded in 1995 by the World Trade Organization (WTO), International Monetary Fund (IMF), World Bank have played an important role in promoting free trade in place of protectionism.
The General Agreement on Tariffs and Trade (GATT) was a multilateral agreement regulating international trade. According to its preamble, its purpose was the substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis. It was negotiated during the United Nations Conference on Trade and Employment and was the outcome of the failure of negotiating governments to create the International Trade Organization (ITO). It subsequently proved to be the most effective instrument of world trade liberalization, playing a major role in the massive expansion of world trade. GATT was signed in 1947 and lasted until 1994, when it was replaced by the World Trade Organization in 1995. The World Trade Organization, (WTO), is the primary international body to help promote free trade, by drawing up the rules of international trade. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible. However, it has been mired in controversy and seen to be hijacked by rich country interests, thus worsening the lot of the poor and inviting protest and intense criticism. Where countries have faced trade barriers and wanted them lowered, the negotiations have helped to open markets for trade. But the WTO is not just about opening markets, and in some circumstances its rules support maintaining trade barriers — for example, to protect consumers or prevent the spread of disease. (Subramanian & Wei, 2007). At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations. These documents provide the legal ground rules for...
Please join StudyMode to read the full document